Opinion
No. 129-40935-1.
February 9, 1970.
[1] Appeal and Error — Review — Scope. When error is not assigned to a trial court's findings of fact and they have become the established facts of the case under CAROA 43, an appeal of the cause is limited to a determination of whether the findings of fact support the trial court's conclusions of law and judgment.
[2] Usury — Elements. A court will not find a transaction to be usurious unless, after examining the substance rather than merely the form of the entire transaction, it determines that there was a loan or forbearance, express or implied; money or its equivalent constituted the subject matter of the loan or forbearance; there was an understanding between the parties that the principal should be repayable absolutely; something was exacted in excess of what is allowed by law for the use of the money loaned or for the benefit of the forbearance; and there existed an intent to exact more than the legal maximum. [See 45 Am.Jur.2d, Interest and Usury § 111 et seq.]
Appeal from a judgment of the Superior Court for King County, No. 684988, George H. Revelle, J., entered November 29, 1968.
Bell, Ingram, Smith, Johnson Level and Richard B. Johnson, for appellants.
Mucklestone Mucklestone and John P. Mucklestone, for respondent.
Affirmed.
Action on a promissory note. Defendants appeal from a judgment in favor of the plaintiff.
On October 7, 1964, Henry Backstrom executed a promissory note with the National Bank of Commerce as payee. The note in the sum of $25,788.73 provided for interest at 12 per cent per annum from March 13, 1963.
The bank sued on the note and the defense of usury was raised. The trial court found that the note was usurious on its face but upon examining the entire transaction concluded that the essential elements of usury were not present. It then denied the defense, reduced the interest rate and entered judgment for the plaintiff. Defendant Henry Backstrom has appealed.
[1] The defendant did not assign error to the trial court's findings of fact. They become the established facts of the case. CAROA 43. The appeal, therefore, is limited to a determination of whether the findings of fact support the trial court's conclusions of law and judgment. Ebenezer A.M.E. Zion Church v. Corporate Loan Sec. Co., 72 Wn.2d 128, 432 P.2d 291 (1967).
[2] The defense of usury depends upon the existence of certain essential elements. Hafer v. Spaeth, 22 Wn.2d 378, 382, 156 P.2d 408 (1945):
The essential elements of usury are: (1) a loan or forbearance, express or implied; (2) money or its equivalent constituting the subject matter of the loan or forbearance; (3) an understanding between the parties that the principal shall be repayable absolutely; (4) the exaction of something in excess of what is allowed by law for the use of the money loaned or for the benefit of the forbearance; and, in some jurisdictions, (5) an intent to exact more than the legal maximum for the loan or forbearance.
To determine whether all these essential elements are present, the courts will look through the form of the transaction and consider its substance. If all the requisites are found to be present, the transaction will be condemned as usurious, but, if any one or more of them are lacking, the parties cannot be charged with an usurious practice. The cases are uniform in their acceptance of these principles. [Citations.]
The usury statute, RCW 19.52.020 — .030, is quasi-penal and the court must not find a violation of that statute unless it can be said, after examining the entire transaction, that it was usurious. Simpson v. Cox, 167 Wn. 34, 8 P.2d 424 (1932).
The trial court specifically found that there was no loan or forbearance incidental to the execution of the note on October 7, 1964; and that there was no intent to exact more than the legal maximum interest rate.
These findings of fact support the court's conclusion and judgment. Affirmed.
JAMES, C.J., and SWANSON, J., concur.